budget deficit – Macleans.cahttp://www.macleans.ca
Canada's national weekly current affairs magazineSat, 10 Dec 2016 00:57:47 +0000en-UShourly1https://wordpress.org/?v=4.4.2Ottawa’s September deficit doubles up on the same month last yearhttp://www.macleans.ca/news/canada/ottawas-september-deficit-doubles-up-on-the-same-month-last-year/
http://www.macleans.ca/news/canada/ottawas-september-deficit-doubles-up-on-the-same-month-last-year/#respondFri, 25 Nov 2016 18:27:04 +0000http://www.macleans.ca/?p=956095The federal government ran a $2.4-billion deficit in September. The bigger shortfall was due to a combination of lower revenue and higher program spending.

Canada’s Finance Minister Bill Morneau (L) and Advisory Council Chair Dominic Barton take part in a news conference following a meeting with the Advisory Council on Economic Growth in Ottawa, Ontario, Canada, October 20, 2016. (Chris Wattie/Reuters)

OTTAWA — The federal government ran a $2.4-billion deficit in September, double the $1.2-billion deficit set in the same month last year.

The Finance department says the bigger shortfall was due to a combination of lower revenue and higher program spending.

Revenues in the month totalled nearly $21.7 billion—down from nearly $22 billion in September 2015—due to lower corporate income tax, non-resident income tax and excise taxes and duties.

Program spending grew to $22.2 billion, up from $21.2 billion a year ago, due to increases in major transfers to persons and other levels of government.

Public debt charges fell to $1.8 billion from $2 billion.

For the first half of the government’s fiscal year, it ran a deficit of $7.8 billion compared with a surplus of $1.6 billion in the same April-to-September period last year.

The government has forecast a $25.1-billion deficit for this fiscal year, which ends March 31.

]]>ST. JOHN’S, N.L. – Taxpayers in Newfoundland and Labrador will bear the brunt of a budget that hikes HST and gas taxes, cuts jobs and imposes “temporary” income-based levies to fight a deficit that will still reach almost $2 billion.

It’s the first budget for the new Liberal government that won power last fall after 12 years of Progressive Conservative rule.

Finance Minister Cathy Bennett said the Tories squandered historic wealth with spending increases and tax cuts hinged on volatile oil prices that have since crashed.

“The previous government’s willingness to mortgage our future has left Newfoundland and Labrador with the biggest deficit and highest net debt ever recorded in our history,” she said in her speech to the legislature.

“As our premier has said, knee-jerk reactions have created mistakes that, unfortunately, Newfoundlanders and Labradorians are paying for now.

“Band-aid solutions will not fix the challenges we face.”

Gas taxes are going up by 16.5 cents per litre starting June 2 and will be reviewed next fall.

An income-based levy of up to $900 is being imposed on all taxpayers to fight the deficit, with the exception of those earning $20,000 of taxable income or less. Bennett said this “temporary tax” will be phased out starting in 2018 as finances presumably improve.

The HST rate will increase by two percentage points to 15 per cent as of July 1 — reversing a rollback Premier Dwight Ball campaigned on, calling the higher rate a “job killer.”

Measures to cut government spending and raise cash are expected to cost average families $3,000 in new taxes and lost baby bonuses while eliminating about 650 public-sector and 2,000 private jobs.

Bennett, who did not buy new shoes as per budget day tradition, said the hard-hitting blueprint affects everyone in the province.

Income taxes are going up for all brackets. Those earning $35,000 to $70,000 will pay 13.5 per cent, up from 12.5 per cent. The rate goes up another percentage point in 2017.

Corporate income tax rates will rise to 15 per cent from 14 per cent, retroactive to Jan. 1, 2016.

Starting Friday, tobacco tax rises one cent per cigarette.

Class sizes are increasing for Grades 4 to 12, affecting an undetermined number of teaching positions. And the operational grant to Memorial University of Newfoundland has been cut by $14 million.

Bennett stressed that the province has still provided cash to help the university keep tuition rates among the lowest in the country, but that it’s up to administrators to set fees.

The budget forecasts a return to modest surplus by 2022-23, assuming Brent crude sells for US$74 a barrel, up from about US$44 in trading this week.

“Our province has been left in a very difficult situation because of the circumstances and the decisions the former administration made, and because of the rapid decline in oil price,” Bennett told reporters Thursday.

“And we have a tremendous amount of work to do to change that.”

Highlights of the Newfoundland and Labrador budget presented Thursday:

—An $8.5-billion spending plan that raises the Harmonized Sales Tax to 15 per cent from 13 per cent as of July 1.

—An income-dependent “deficit reduction levy” of up to $900 a year for the highest earners to fight a deficit still forecast to reach $1.8 billion this fiscal year. Those with $20,000 taxable income or less exempt.

—Offshore oil royalties that once provided 30 per cent of provincial revenues have crashed to an estimated seven per cent at $502.1 million.

—Gas tax increase of 16.5 cents per litre as of June 2, to be reviewed in the fall.

—Starting Friday tobacco tax rises one cent per cigarette.

—Class sizes to increase for Grades 4 to 12, operational grant to Memorial University of Newfoundland cut by $14 million.

—Measures to cut spending and raise cash will cost average families $3,000 a year, and will trim about 650 public-sector jobs and 2,000 private jobs.

—Income tax hikes for all brackets. Those earning $35,000 to $70,000 will pay 13.5 per cent, up from 12.5 per cent. The rate goes up another percentage point in 2017.

—Corporate income tax rate goes to 15 per cent from 14 per cent, retroactive to Jan. 1, 2016.

—Return to modest surplus by 2022-23, assuming Brent crude trades for US$74 a barrel, up from about US$44 in trading this week.

]]>http://www.macleans.ca/politics/newfoundland-budget-delivers-tax-hikes-job-cuts-2b-deficit/feed/0Ottawa’s stake in General Motors could help slay the deficithttp://www.macleans.ca/news/canada/ottawas-stake-in-general-motors-could-help-slay-the-deficit/
http://www.macleans.ca/news/canada/ottawas-stake-in-general-motors-could-help-slay-the-deficit/#respondSun, 22 Feb 2015 19:17:48 +0000http://www.macleans.ca/?p=683103Critics speak out against the idea of selling Canada's multibillion-dollar GM stake: 'That's selling the family silver to keep eating'

OTTAWA – The Harper government’s push to deliver a balanced budget despite the burden of low oil prices has attracted fresh attention to a potential stockpile of federal cash: a multi-billion-dollar taxpayer stake in the auto business.

The government’s remaining 73.4 million shares in General Motors are now worth more than $3.4 billion in total, thanks to the combined effect of a solid stock price and a weakened Canadian dollar.

In fact, once the Canadian exchange rate is factored in on the U.S.-priced stock, its per-share value is higher than it has been in more than five years.

The government needs to make $4 billion in proceeds from its remaining shares to break even on its initial investment, which would leave it only $600 million short if it sold the stock at current values.

Earlier this month, Ottawa became the only North American government still holding stock acquired as part of the 2009 effort to bail out the then-sputtering automaker.

Ontario’s recent sale of its last GM holdings may add to the federal government’s temptation to offload some — or all — of its own stock. The U.S. government sold the last of its stake in December 2013.

Renewed interest in Ottawa’s stash of GM shares surfaced last month as one of several possible money-generating options that could help the Conservative government live up to its promise of balancing the 2015-16 election budget.

Fulfilling the pledge will be central to Tory re-election fortunes. The government insists it will achieve a balanced budget even as lower crude prices indirectly carve billions of dollars out of federal revenues.

Last fall, the government predicted a $1.6-billion surplus for 2015-16, but the price of oil fell even further in the months that followed and forced Finance Minister Joe Oliver to delay the budget until at least April.

Oliver has even acknowledged achieving balance may mean dipping into Ottawa’s $3-billion contingency reserve, which was set aside for unforeseen circumstances.

Selling the GM stock and booking the proceeds in the 2015-16 budget could help Ottawa offset the financial blow from the oil slump. Ottawa has reiterated its intention to eventually unload its shares.

But Conservative MP Rick Dykstra — who represents the Ontario riding of St. Catharines, home to a GM plant — said any share sales in the coming months shouldn’t be connected to the balanced-budget objective.

The government’s primary goal for holding the shares in the first place is to secure a good return for taxpayers and hopefully get back its initial investment, Dykstra said. It doesn’t need to sell them off to balance the books, he added.

“If we were to do it, it would obviously be because it would be most beneficial to both the federal government and taxpayers.”

In last year’s federal budget, the government promised to sell the shares in an “expeditious manner, while maximizing value for Canadian taxpayers.”

So, how much does the government stand to gain?

Ottawa initially booked the value of the stock at about $1.1 billion, according to the Finance Department. The net gain or loss from a sale would be the total proceeds minus the book value, a spokesman said.

That would mean a tidy net gain of $2.3 billion if the shares were sold at the current market valuation of about $3.4 billion.

Pulling in $3.4 billion would also leave the government only $600 million short of breaking even on the original investment.

Through repaid loans and previous sales of GM holdings, Ottawa has already recouped about $3.2 billion of its initial $7.2-billion contribution to the auto bailout, the Finance Department said.

“We’re getting there, but we’re not at that level yet,” Dykstra said about the prospect of breaking even. He’s not aware of any government timetable to sell shares, he added.

However, conditions show the stars could soon be aligned for the government to offload another batch — or the entire lot.

Factoring in the exchange rate, Friday’s closing price for GM stock was $47.20 per share — a five-year high after conversion.

By comparison, Ottawa sold 30 million GM shares in September 2013 at $37.96 per share, after conversion.

Earlier this month, the Ontario government sold the last of its GM shares for $1.1 billion, cash it plans to invest in public infrastructure.

Leslie Shiell, an assistant professor at the University of Ottawa who has studied the auto bailout, cited the Ontario case as an example of how it makes sense for governments to sell one asset in order to pay for another.

Selling assets to generate revenue, however — “liquidating your wealth,” he called it — is less prudent, Shiell warned.

“That’s selling the family silver to keep eating. That’s not sustainable.”

Unifor, the union that represents 7,000 GM workers in Ontario, has urged Ottawa to hold on to the shares.

The stock’s value could continue to rise, said Unifor economist Jim Stanford, who noted that remaining a shareholder would ensure the federal government has a seat at the company’s table.

“The worst reason to sell GM shares is to help the government cover its little optics problem with a possible deficit,” Stanford said.

]]>OTTAWA – The Canadian government says it posted a budgetary deficit of $3.3 billion over the first eight months of the 2014-15 fiscal year — a considerable change from the $13.4 billion shortfall over the same period in 2013-14.

The Finance Department released its latest fiscal monitor Friday, a document that shows the federal books received a boost from a $6.5-billion drop in the government’s direct program spending between April and November 2014, compared to the same period the year before.

The report said the government also saw a $6.3-billion increase in revenues over the first eight months of 2014, due in large part to a $2.2-billion gain from personal income taxes and a $2-billion boost from corporate taxes.

For the month of November, the document says the government posted a $600-million surplus, which compares with the government’s deficit of $600 million in November 2013.

In its fall fiscal update, the Harper government projected a $2.9-billion deficit by the end of the 2014-15 fiscal year, which ends March 31.

Dalton McGuinty resigned his legislative seat today, and appraisals of the former Ontario premier’s legacy have begun. Attention has naturally fallen on the power-plants saga and the mass deletion of emails by staff in the Premier’s Office that followed (the latter, apparently, being a ham-fisted attempt to cleanse the historical record of the former).

But the real story of the former McGuinty era lies in the financials, and it’s not happy reading. A cursory look at Ontario’s fiscal position suggests the Liberals have left a burden that, in the future, will limit the province’s ability to help those in the greatest need.

It’s a curious outcome for a leader whose political brand boiled down decency, duty and responsibility—the boy scout who grew up to be Premier Dad. And yes, a lot of subjective values feed into the essential “legacy” question, namely, whether a leader left the place in better shape than he found it. But at least one tangible measure of leadership—money—won’t flatter McGuinty. Here’s why:

DEBT

Even by the standards of bond-happy Canadian provinces, Ontario has dug itself a scary-deep hole. Between 2003-04, McGuinty’s first year in office, and 2011-12, the province’s net debt rose more than 70 per cent and now stands at nearly a quarter of a trillion dollars. That’s about $18,000 for every man, woman and child—which is second only to Quebec’s per-capita debt and not by much. According to Statistics Canada projections, Ontario’s net debt will hit 40 per cent of provincial GDP some time next year.

DEFICIT

Ontario’s bills wouldn’t be so daunting, were it anywhere close to being able to pay them down. Instead, the province faces a $12-billion shortfall in 2013 even after extensive cost-cutting. That is, by coincidence, roughly what taxpayers will shell out in interest on provincial debt in the next fiscal year—a cost that will go up because the province keeps adding to its liabilities.

The price will rise even more sharply if bond-rating agencies further downgrade Ontario’s debt.

TIN HANDCUFFS

What this means to average people: Ontario can no longer help. It can’t help the needy with augmented programs. It can’t help the sick by paying for new drugs. It can’t give its employees a cost-of-living raise. At about $8,400 per person, program spending is already lowest among provinces (though the method of calculation here can vary; some place Quebec at the bottom) and has been for the last three years. The perennial “have” province is now a have-not, and may soon need the help of its western counterparts to maintain existing levels of service.

HE ACTED TOO LATE

This seems an opportune moment to pause and consider the words of Don Drummond, the former bank economist McGuinty commissioned to draw a roadmap out of this fiscal tar pit.

Debt is costly, since interest must be paid on the province’s outstanding bonds and other obligations. Unusually low interest rates in recent years have allowed Ontario to borrow cheaply, but as interest rates rise to more normal levels, so will the cost of servicing the growing debt, and that will divert dollars away from public programs.

If McGuinty had heeded this sort of advice just a few years earlier (there were plenty of smart people offering it) he could have saved at least some of the pain Ontarians now face. Alas, he waited until 2011 to reach out to Drummond, and even then shied from the economist’s tougher recommendations.

DAYS OF WINE AND ROSES

How we got here is no mystery. Program spending under McGuinty climbed by an average of 7.6 per cent annually before the financial meltdown of ’08-09. During that period, Liberals got in the habit of saying they were backfilling a program deficit wrought by the program-slashing government of Mike Harris—costs downloaded to municipalities and a strained health-care system.

It was only partly true: billions also went out in the form of wage increases and benefits to teachers and other unionized public-sector employees. Then, after the U.S. economy deflated, and Ontario’s swooned, the province had to go cap in hand to the unions to get the money back.

Needless to say, it didn’t work and the province eventually traded its cap for a legislative hammer.

BANG FOR THE BUCK? OR A WHIMPER?

Here’s where we get to the subjective part: will Ontarians see evidence of all that spending when they look around their communities?

They’ll see full-day kindergarten, which costs $1.5 billion per year and may or may not yield the dividends promised. But they’ll also see flaking bridges, pocked streets and crumbling expressways.

They’ll see a Greenbelt protecting the lands around Toronto from sprawl. But they’ll also see a courthouses so crowded accused criminals walk free because they cannot be tried in time.

They’ll see pension liabilities; the burden of an aging population; or boondoggles like eHealth, the air ambulance system and, yes, those dastardly power plants.

We can debate all day about how a government should spend its money, but if it hasn’t got any, the whole discussion is moot. And if Dalton McGuinty isn’t exclusively responsible for landing us here, he bears at least part of the blame.

]]>The Conservative government’s plan is to eliminate the deficit before the next election in 2015: it wants to campaign on a platform of tax cuts – income-splitting in particular – but it also knows that it can’t credibly do so unless public finances are in balance. This is the third budget in a row that has been crafted to fit this narrative, but it’s getting harder and harder to squeeze into it:

Projections for the current year’s deficit have been revised up from $19.4 billion to $25.9 billion, and forecasts for the 2013-14 deficit have been revised from $9.4 billion to $18.7. Today’s budget predict’s that the government will be able to go on to turn that $18.7 billion deficit into a surplus in the space of 24 months by letting its current strategy run for another two more years.

Apart from the self-imposed political deadline, there’s nothing special about the 2015 deadline for returning to surplus. And it may be that the world economy will finally begin to recover in earnest in the next couple of years, boosting Canadian GDP and Canadian government tax revenues. But what if it doesn’t? Will the Conservatives be forced to abandon their strategy of simply holding the line on nominal direct program spending and make deep cuts? Or will they have to re-think their 2015 campaign strategy?

The Conservatives can’t keep kicking the can down the road: they’re starting to run out of sidewalk.

Alberta premier Alison Redford has put her government in national headlines with news that the province, at a time of high oil prices and outstanding labour-market conditions, is going to finish with an enormous deficit for 2012-13. The actual shortfall for the first half of the year came to $1.3 billion, and the 12-month total might be more than $4 billion. Redford blames what she calls the “bitumen bubble.” Alberta has sometimes gotten into fiscal trouble because of the unpredictability of benchmark prices for oil, but this time it is getting crushed by poor regional prices as the U.S. Midwest transforms from needy buyer to massive seller.

Economists and pundits inside and outside Alberta have used the opportunity to repeat long-standing pleas for the province to make its public revenue less oil-dependent. Since oil is a “non-renewable resource” that can only be sold once, goes the theory, the province’s share shouldn’t be used to meet ongoing government expenses; the worthy thing to do is to set it aside and invest it.

I find aspects of this argument amusing. In the early ’70s everyone agreed that Alberta’s “non-renewable” conventional oil would be gone in a decade or so. Yet the trend was for the amount remaining to keep getting larger. Meanwhile, how’s Newfoundland making out with its hypothetically “renewable” cod biz?

Every “resource” is a mixture of matter and human labour: if we are going to sequester oil royalties, that means sequestering not just the value of the sold hydrocarbons, but the added value of the effort by present-day Albertans to find, extract, and, when it comes to tar sands oil, change it into something deliverable to refineries. Syncrude Ltd. is called “Syncrude” for a reason: it sells a product synthesized from nature’s materials, in the same way—in principle—that a chair is.

Even Albertans have some trouble understanding this. You can only sell a barrel of oil one time, once it’s in the actual barrel. But given the presence of hydrocarbons in a place, it is inherently likely to go through cycle after cycle of new exploration and increased efficiency. In essence there aren’t “renewable” and “non-renewable” resources; only less renewable and more renewable ones.

The idea of sequestering oil revenues is, I think, a subtle combination of utilitarian appeal and moral suasion. The government shouldn’t “squander” current flows of oil money, we hear; it should “save” virtuously for the future. The implied premise, interestingly, is that current government spending is “squandering” rather than “investment.” If it cannot be proper to expend precious oil revenue on current government programs, surely the capture and use of worker and investor income is equally unjustifiable? Our working lives are the ultimate non-renewable resource, no?

If you read credit reports on Alberta, you find that the raters take an interesting view of the Alberta government’s supposed abuse of oil revenues: namely, that the province is positioned to withstand an economic shock like the “bitumen bubble” precisely because it already used oil money to eliminate debt. Like a household that had run up a credit-card balance, Alberta chose not to pour windfall oil revenue into some investment apparatus like the Heritage Fund. It paid down the credit card. In this sense Albertans and their AAA-rated government are already living in a future benefiting from sound past stewardship.

I find myself wishing that economists would set aside quarrels over oil-revenue policy and help out with the practical corollary of a large deficit: chopping government spending. Alberta governments have invested plenty of energy in windbag futurological reports on what to do with oil surpluses. None has yet done what Ontario did: recruit one guy (star economist Don Drummond) to autopsy the budget and publicly identify areas of excessive fat. Premier Redford has been elliptical about what specifically needs doing about spending in the face of her “bitumen bubble.” Putting a Drummond to work wouldn’t cost much; heck, maybe Drummond is available!

He wouldn’t necessarily find it easy. Alberta already survived a generation of remorseless program-slashing, and it seems likely that high current spending is mostly a product not of specific boondoggles, but of all-around bad habits concerning public sector employee compensation. There are probably exceptions: Alberta’s alphabet soup of agriculture supports, to take one example, seems like a good candidate for economizing. But the tendency of premiers to bribe interest groups at politically sensitive moments might be the biggest problem of all, and no one has shown any appetite for tackling it.

]]>http://www.macleans.ca/general/not-so-renewable-revenue/feed/35Starving the beast: What Canadian Conservatives can teach Republicanshttp://www.macleans.ca/economy/business/starving-the-beast-what-canadian-conservatives-can-teach-us-republicans/
http://www.macleans.ca/economy/business/starving-the-beast-what-canadian-conservatives-can-teach-us-republicans/#commentsWed, 07 Nov 2012 21:20:24 +0000http://www2.macleans.ca/?p=312367Stephen Gordon on the fiscal cliff and Harper's quiet, and more successful, strategy

Wait until the resulting budgetary deficit becomes a problem important enough to solve.

Cut spending in order to deal with the budget crisis.

Go to 1.

The goal of this exercise is to steadily reduce the size of government. The idea has its origins in the US conservative movement, but US conservatives haven’t had much success in implementing it. Steps 1 and 2 work as advertised, but politicians can never get the hang of the third part.

Here is a graph generated at the Federal Reserve Bank of St Louis’ FRED database. The red line is expenditures (net of interest payments on the debt), and the blue line is revenues; both series are expressed in terms of shares of GDP:

The Reagan cuts of the 1980s produced deficits, but these were eventually offset by the Clinton years’ tax increases, not by sustained reductions in government spending. (The decline in the red line in the 1990s was due more to strong GDP growth than spending restraint.)

The Bush tax cuts of the 2000s also produced deficits, but their long-term effects were mitigated by their temporary nature: this was the price of obtaining the necessary support of Democratic lawmakers. It was more or less an open secret that the goal was to make those cuts permanent eventually, but the necessary spending cuts never came.

The scale and suddenness of the scheduled tax increases (there are also associated spending cuts) is too large to simply let happen: the U.S. recovery is not yet strong enough to withstand the shock of a large fiscal contraction. But a newly re-elected Barack Obama is unlikely to follow through on GW Bush’s original plan, and House Republicans seem resigned to the inevitability of tax increases.

Meanwhile, Stephen Harper is quietly implementing a Canadian “starve the beast” strategy, and not without success. Unlike the Republicans, the Conservatives have actually reached stage 3. Step 1 was the reduction to the GST, which created a structural deficit. After a certain period of denial, step 3 was reached in the austerity measures announced in the 2012 budget.

Federal revenues have been held below 15 per cent of GDP for four years in a row, well below the levels we’ve seen in the last fifty years. And the outlook is for more of the same.

Republicans are entering a rebuilding phase. I wouldn’t be surprised if some of them start paying close attention to how the Canadian Conservatives have managed to pull off the “starve the beast” trick that always seems to elude U.S. conservatives.

]]>Chances that the Conservative government of Stephen Harper will be able to keep its elections pledge of balancing the budget by 2014-2015 look slim, the Parliamentary Budget Office said in a report, as well as a number of private-sector economists. At fault is the slowing pace of the Canadian economy, whose growth prospects have been revised down by the PBO. The Office now expects Ottawa to run a deficit of $18.7 billion in 2014-2015, $13.1-billion the following fiscal year and $7.3-billion in 2016-2017.

]]>http://www.macleans.ca/general/conservatives-unlikely-to-meet-deficit-targets/feed/4The Commons: Does anyone here know how to balance a cheque book?http://www.macleans.ca/politics/ottawa/the-commons-does-anyone-here-know-how-to-balance-a-cheque-book/
http://www.macleans.ca/politics/ottawa/the-commons-does-anyone-here-know-how-to-balance-a-cheque-book/#commentsThu, 13 May 2010 22:05:05 +0000http://www2.macleans.ca/?p=126306In this House nothing can be said to be certain, except aspersions and taxes

]]>The Scene. Bob Rae opened this afternoon’s session with a vigorous display, lecturing the government on the need to reconcile environmental and economic policy and even thumping his desk with his right hand—his flare seemed to ignite a certain passion on all sides. So this last afternoon before a blessed break week was full of vim, most notably on the matter of our overdrawn national bank account.

“Mr. Speaker, it is the wrong choice to cut taxes for the largest and wealthiest corporations while the global economy remains fragile,” Bonnie Crombie cried from the back row of the Liberal side. “It is the wrong choice to cut taxes for the largest and wealthiest corporations while a debt crisis rages in Europe. It is the wrong choice to cut taxes for the largest and wealthiest corporations when markets fluctuate at the drop of a hat. Why does the government plan to borrow money and mortgage our children’s future to pay for its reckless corporate tax cuts?”

The Finance Minister did not have an answer for this one, but he did have aspersions (and in this place that’ll do).

“Mr. Speaker, we know that the Liberal opposition wants to raise taxes,” Mr. Flaherty declared. “They want to raise personal taxes for Canadians. They want to raise taxes for small and medium size Canadian businesses. They even muse about raising the GST. We know, from the way they have voted in this place, that they are opposed to the tax reductions that we have made over the last four years, that is $3,000 on average for every Canadian family in tax reductions over the course of the past four years.”

The government side howled as a dozen members helpfully pointed in the direction of Bob Rae, the former Ontario premier seated in the Liberal front row.

“It is thanks to a decade of sound Liberal financial management,” Ms. Crombie continued after a pause, “we are not in the same mess as Greece and other countries.”

More hooting and mocking from the government members.

“I know the Liberals are in favour of raising taxes,” Mr. Flaherty said when Ms. Crombie had finally finished. “Most Canadians actually do not want to pay more taxes and they do not want to go through the cuts that the Liberal Party of Canada government did in the mid-1990s.”

Mr. Flaherty went on to refer to Mr. Rae who had, in a previous career, apparently lamented for the spending cuts of the previous Liberal government. Alas, the Finance Minister’s time ran out before he could finish and then it was John McCallum, Mr. Flaherty’s old nemesis, who was up with things to say.

“Mr. Speaker,” Mr. McCallum fired back, “the only party that wants to raise taxes is the Conservative Party with its massive EI premium hikes, costing 200,000 jobs.”

Over again to Mr. Flaherty, who noted that Mr. McCallum had, in 2007, supported cuts to the corporate tax rate. Then back to Mr. McCallum, who wished to provide some context to that long-ago year. The two combatants were now shadowboxing each other, each going red, or at least redder, in the face from the effort expended.

“Mr. Speaker, remember that in 2007 we were running a surplus and we were in favour of lower corporate taxes, but not when it puts the country into greater debt, which is precisely what the minister is doing,” ventured Mr. McCallum.

“We are at a crossroads,” he declared. “Borrow money today to cut corporate taxes or freeze corporate taxes, fight the deficit and invest in education.”

“We can take the Conservative path of the eighties and become more like Greece, or the Liberal path of the nineties and become more prosperous,” he concluded. “Why are Conservatives choosing more debt over prosperity?”

And so Mr. Flaherty was obviously compelled to question Mr. McCallum’s patriotism. “Mr. Speaker, I know what the Liberal government wreaked on the Canadian people in the mid-1990s, what it did to our schools, what it did to higher tuition in universities, what it did to our hospitals, what it did to nurses. All of those things, that is what the Liberals did in the 1990s,” he reported. “This is Canada. We have the best fiscal situation in the G7. We have the soundest financial system in the G7. We have the highest credit rating in the world. The honourable member should be proud of the performance of his country and stop knocking it.”

And so it was settled. We shan’t raise taxes, we shan’t cut spending. We shall do nothing and simply hope for the best.

The Stats. The environment, the oil industry and Helena Guergis, five questions each. The United Nations and taxation, four questions each. Culture, three questions. Securities regulation, Haiti and Hepatitis C, two questions each. Parliament, the budget, the navy, labour and firearms, one question each.

]]>http://www.macleans.ca/politics/ottawa/the-commons-does-anyone-here-know-how-to-balance-a-cheque-book/feed/58‘These are the choices we’ve made’http://www.macleans.ca/politics/ottawa/these-are-the-choices-weve-made/
http://www.macleans.ca/politics/ottawa/these-are-the-choices-weve-made/#commentsTue, 11 May 2010 17:53:59 +0000http://www2.macleans.ca/?p=125551Seems Mr. Ignatieff’s performance at QP yesterday was a warm up for today’s speech in Mississauga.In the next election, you will have a clear choice. On one hand, a …

]]>Seems Mr. Ignatieff’s performance at QP yesterday was a warm up for today’s speech in Mississauga.

In the next election, you will have a clear choice. On one hand, a Conservative government that offers further corporate tax cuts we can’t afford. On the other hand, a Liberal alternative that freezes corporate taxes, fights the deficit, and makes targeted investments in our future—learning, care, and leadership.

In the weeks and months ahead, we will work to earn your trust. We will make the case for change. We will make the case for a Canada where every child gets an equal shot, and every family a helping hand. A Canada that leads by example.

Canada’s economy will not fully recover until 2013 and the federal government will carry a structural budgetary deficit of C$19 billion ($17.6 billion) after the crisis, a report by the parliamentary budget officer said on Monday …“PBO calculations continue to suggest that the budget is not structurally balanced over the medium term,” the report said. “PBO estimates that the structural balance would deteriorate from essentially a balanced position in 2007-08 to an C$18.9 billion structural deficit in 2013-14.”

]]>http://www.macleans.ca/politics/ottawa/the-budget-is-not-structurally-balanced/feed/42Idea alerthttp://www.macleans.ca/politics/ottawa/idea-alert-4/
http://www.macleans.ca/politics/ottawa/idea-alert-4/#commentsMon, 05 Oct 2009 17:15:50 +0000http://www2.macleans.ca/?p=85624The separatists kindly suggest a way out of deficit.The BQ said the federal government should drastically reduce the size of the federal civil service, replacing every three workers that …

The BQ said the federal government should drastically reduce the size of the federal civil service, replacing every three workers that retire over the next five years with just one worker. Reducing the federal payroll that way could eventually cut Ottawa’s annual spending on its own workforce by billions each year. It also said Ottawa could chop the $3 billion it spends annually on “professional services,” money paid to outside consultants for advice on everything from communications to policy decisions to temporary help.

Laforest also said Ottawa should do what U.S. President Barack Obama has done and ask the country’s wealthiest citizens to pay a greater share in income tax to eliminate the deficit. The Bloc suggests those Canadians with a taxable income of $150,000 a year should pay an additional one per cent in income taxes. That measure, the BQ calculates, would affect about 450,000 Canadians and could net Ottawa an additional $1.5 billion a year.

Canadian Prime Minister Stephen Harper said on Friday he expected Canada’s economy to recover fully by the 2010-2011 fiscal year. He also said he would let the deficit run if needed and would not hike taxes or cut spending to bring it under control.

]]>http://www.macleans.ca/politics/ottawa/tax-increase-spending-cut-or-none-of-the-above/feed/4The Commons: Private peace, public warhttp://www.macleans.ca/authors/aaron-wherry/the-commons-private-peace-public-war/
http://www.macleans.ca/authors/aaron-wherry/the-commons-private-peace-public-war/#commentsTue, 16 Jun 2009 22:35:22 +0000http://www2.macleans.ca/?p=64911While Harper and Ignatieff enjoyed a "productive" meeting, things in the House were a bit less civil

]]>The Scene. In the sandstone bunker named for John A. Macdonald’s public works minister, a man one biography describes as having left politics in “utter disgrace,” Michael Ignatieff and Stephen Harper honoured their forefathers with a meeting. According to one account, Mr. Ignatieff entered the building, home to the Prime Minister’s Office, around 2pm and exited about five minutes after three. A Canadian Press reporter on the scene claims the Liberal leader left through the Elgin Street exit, skillfully avoiding said reporter’s attempt to question him.

Requests for details of the proceedings would not go completely ignored though. Indeed, in short order there were identical statements from those assigned to speak on behalf of both men. The meeting was described as “productive”—a word that would seem to indicate there was a minimum of swearing and likely a complete lack of physical violence. There are vague promises, as of this writing, that the two will meet again later today. The adjective used to describe those discussions will surely be the subject of intense negotiation.

Across the street and up the hill, the business of Parliament was compelled to proceed without them. And not yet sure of how “productive” the negotiations would be, the parties of Messrs. Ignatieff and Harper were compelled to loudly and forcefully make their claims.

It began, as it usually does, with a nod in the general direction of productivity. “Mr. Speaker, in a reasonable and measured way the leader of the opposition raised four important issues yesterday. The Prime Minister responded by offering a meeting which is taking place now,” Ralph Goodale reported to the House.

“The issues were these: the isotope crisis, employment insurance improvements, the federal deficit and actual spending on infrastructure,” he continued. “On this latter point who in the government has a complete tally of actual infrastructure expenditures to date, not just announcements or promises or wishful thinking but hard expenditures already made? Who can give those numbers specifically?”

For whatever reason, the government sent up not the Finance Minister, whose job it is to account for such things, nor the Transport Minister, whose job it is to oversee such expenditures, but Tony Clement, the Industry Minister whose job now it apparently is to follow the Liberal leader wherever he goes, acting outraged and exasperated at whatever Mr. Ignatieff dare says.

“Mr. Speaker, it is very simple,” Mr. Clement began.

What followed, of course, was complicated, evasive and more than a little inflammatory.

“We need only go to actionplan.gc.ca to see 3,200 projects in various stages of implementation and not just on the side of stimulus spending for infrastructure,” he continued. “There is an extra $10 billion that we have announced that we are now in the process or our partners are in the process of hiring the construction workers, the architects and so on.”

Then, a parting shot.

“What this is really about is the fact that the leader of the Liberal Party cares more about himself than the future of these projects, cares more about himself than the future economic recovery of this country,” he lectured. “That is a shame. Worse than that, it is an abomination.”

It is on such language, of course, that the most productive of working relationships are based.

“Mr. Speaker,” observed Mr. Goodale, not one to miss a detail, “the minister still cannot give the numbers.”

The Liberal house leader moved next to engage the minister on the shame to which he referred. Yesterday, the government side claimed that any election would bring to an immediate halt any and all spreading of federal aid, an end to the stimulative building of parking spaces, small town libraries and hockey rinks across this great land. Shortly thereafter though, one of those meddlesome members of the press gallery had placed a call to the treasury board and learned that some 92.9 per cent of necessary funding had already been approved and was ready to go.

Asked to admit as much, Vic Toews, president of the treasury board, rose to strenuously disagree with the estimates of his own department. “Mr. Speaker, Canadians do not want an election. Neither does our government,” he offered. “If the opposition votes to bring down our government negotiations on infrastructure contribution agreements between the various levels of government will immediately cease.”

And so the abomination was apparently now a hostage crisis.

Whatever soft and reasonable tones were being used inside Langevin, the discussion in the Commons was now a test of vocal range. Vic Toews yelled his condemnation, his pointy finger not quite as impressive as Mr. Harper’s, but sufficiently accusatory in the moment. Goodale, he of broad shoulders and wide cuffs, blustered and boomed and glared, the human equivalent of a bullhorn.

“Mr. Speaker,” Goodale observed, “that answer is only a confession of incompetence.”

“The opposition members are being irresponsible,” responded Toews. “Shame on them!”

John Baird looked on gleefully.

Denis Coderre, added his baritone to the debate. Toews barely paused to breathe in response. Coderre shouted something about Canadians dying of hunger for lack of employment insurance benefits this summer. Diane Finley promised to get back to him in the fall. Gilles Duceppe stood and put all weaker voices to shame, his white hair nicely bringing out the maroon in his face.

Jack Layton took his turn, compelling Clement to get back on his feet and wave his arms all about, conducting again that imaginary orchestra in his head. David McGuinty posited a couple of terribly specific questions on the isotope shortage, Leona Aglukkaq and Lisa Raitt combined to duet on a hymn of perfect generalities. Jim Flaherty stood to explain away the federal deficit, Marlene Jennings’ unbroken stream of invective broke his concentration.

“Mr. Speaker, I can hear the member for Lachine,” he said. “She might want to listen so she will understand what is going on in terms of the deficit.”

Jennings took the opportunity to inform the Finance Minister that her riding was fully known as Notre-Dame-de-Grâce—Lachine. So there.

Nearer the end, Thomas Mulcair rose full of frustrated principles and made some insinuation about Mr. Ignatieff’s attitude toward his fellow citizens. No one seemed to understand entirely his point, but it seemed intended as an insult. And Mr. Baird made a great show of taking offense.

“Mr. Speaker, I will not engage in such harsh language when it comes to my leader of the opposition,” he admonished to fits of laughter from the government side. “My leader of the opposition is right now working with my Prime Minister to do the right thing for Canadians, to make things happen, to create jobs so we have just a little more hope and a little more opportunity in this country.”

No doubt with such obviously sincere expressions of conciliation echoing through the House, the signing of a deal tonight inside the hallowed halls of Langevin is but a foregone conclusion.

The Stats. Employment, 10 questions. The economy, Chalk River and aboriginals, four questions each. The federal deficit, Bisphenol A, government expenditures, product labelling and trade, two questions each. Taxation, forestry, fisheries and pensions, one question each.

]]>http://www.macleans.ca/authors/aaron-wherry/the-commons-private-peace-public-war/feed/8It is sometimes worth paying QP some attentionhttp://www.macleans.ca/politics/ottawa/it-is-sometimes-worth-paying-qp-some-attention/
http://www.macleans.ca/politics/ottawa/it-is-sometimes-worth-paying-qp-some-attention/#commentsTue, 16 Jun 2009 04:13:19 +0000http://www2.macleans.ca/?p=64644There is apparently some lament—from no less than the Prime Minister even— that the Liberals didn’t use Question Period this afternoon to follow up Michael Ignatieff’s announcement this morning. Funny…

]]>There is apparently some lament—from no less than the Prime Minister even— that the Liberals didn’t use Question Period this afternoon to follow up Michael Ignatieff’s announcement this morning. Funny thing is, they did.

Indeed, between Michael Ignatieff, John McCallum and Michael Savage they managed to broach the isotope shortage, wonder about the latest deficit projections, claim confusion over government spending on infrastructure and ask if the government might be interested in fixing employment insurance. They moved on then to other concerns.

Funnier thing, they’ve been asking the same sorts of things for awhile now. Months, even.

He first asked about EI reform on March 24. He first asked about delays in stimulus spending on May 12. He first asked about the deficit on May 28. And a few days later, on June 2, he got in his first question on the isotope shortage.

Now, Mr. Ignatieff made it fairly explicit when Parliament returned in January that he would be using Question Period to ask questions to which he actually wanted answers. But this has obviously proved an abysmal failure. If Parliament survives to see the summer, Mr. Ignatieff should perhaps plan to return in the fall with a proposal that Question Period be done away with in favour of dueling press conferences.

]]>The Scene. Michael Ignatieff, in dark suit and white shirt, his tie red with white stripes, strode into the National Press Theatre and placed his notes on the wooden podium in front of him. He attempted first to make himself clear.

“The Liberal party is not seeking an election,” he said. “We want parliament to work. We want to replace confrontation with cooperation.”

There was a caveat. There is always a caveat. “But,” Mr. Ignatieff continued, “we need the Prime Minister to deliver the accountability Canadians expect from their government.”

He began then to tell the woeful tale: of the fall economic update that nearly ate Canada, of political crisis and untended recession, not to mention those allegations of sedition.

“There is no coalition,” he assured.

The nation let slip a heavy sigh of relief.

He traced his party’s previous demands that the government report regularly to Parliament on its progress. He dismissed the Bloc and NDP as parties of perpetual opposition. He asserted his intent to one day win the right to govern. And then he arrived at the central concern of this warm Monday morning in June.

“We listened to the Prime Minister. We studied the report carefully and we consulted with Canadians,” he assured. “And we have serious questions about this report and the government’s performance.”

This was now assuredly not going to end well, serious questions not particularly tolerated in this Ottawa.

He wanted, he said, a resolution to the inefficiencies of our current system of insuring the unemployed. He wanted, he said, a clear explanation of the money spent so far and the money to be spent in the coming months. “Note my words,” he explained. “Not committed, not authorized, not flowing, not announced, but spent.”

He wanted, he said, to know the precise state of the nation’s finances and the government’s specific plan to rebalance the books. He wanted, he said, to know the government’s plan to see the health care system through the current shortage of medical isotopes.

He wanted, apparently, to restate the questions with which his side has been hounding the government for months now to little effect.

“So where do we go from here?” he asked himself. “I am not seeking an election. Canadians don’t want an election. I don’t want an election. But our job means standing up for our principles, standing up when the government lets Canadians down.”

He motioned mostly with his left hand, clenching his fist, putting his index finger and thumb together, opening his hand and chopping forward. He shifted his weight from one foot to the other, his angular eyebrows bobbed and weaved. He smiled slightly. He sought seriousness. He clarified several times that, worse coming to worse, his party would vote against the government’s latest request for cash. He fell in love with words like “reasonable.”

“I think reasonable people can find reasonable grounds,” he said. “That’s what cooperation means in politics.”

“I just want to give a sign to the Prime Minister that I’m a reasonable person,” he offered.

“I’m just trying to work with the government to make Parliament work,” he pleaded. “That’s the situation. And the fact that I, in your words, I left the Prime Minister a way out, well, that’s my style. I’m trying to work cooperatively. That’s what I’ve done from the beginning.”

“This is what leadership means,” he surmised.

He broke character rarely, lamenting that he and Mr. Harper haven’t spoken since January, damning the government’s handling of the isotope shortage, refuting Conservative claims about Liberal intentions, pausing briefly to impersonate a teenager spraying a garden hose all over the lawn to explain the government’s approach to federal spending.

He finished his half hour with a soliloquy of sorts.

“If you’ll allow me to conclude on one note,” he said. “My stake in this is actually proving to Canadians, who are very skeptical about politics and our political system, that we can make this system work for them. That we can hold a government to account, get them to improve their performance, get good government for Canadians. That’s the big prize here actually. Make Canadians feel we got a pretty good system here and it works for Canadians and it delivers results for them. We get that, good result.”

Looking pensive, he exited the stage.

Four hours later, Stephen Harper, in dark suit and white shirt, his tie red with multi-coloured stripes, strode into the National Press Theatre without notes. He hadn’t expected to be here, had hoped the official opposition would give him an opportunity to respond in the House during Question Period. Mr. Ignatieff had insisted on asking about our looming national health care crisis, thus necessitating this visit.

“I’m here because I did anticipate Mr. Ignatieff would ask me some questions today in the House of Commons that he never asked me,” he told the assembled press, “so I’ll give you a chance to ask some of them.”

Standing at the podium, Mr.Harper attempted first to make himself clear.

“Just very briefly, Mr. Ignatieff said he doesn’t want an election,” he recounted. “I don’t want an election. I don’t think anybody wants an election. I don’t think anybody in Canada wants or expects an election.”

There was a caveat. There is always a caveat. “If he wants to avoid an election and see the spending continue, the easiest way to do that is simply vote for the estimates,” he vaguely threatened, “vote for the spending to continue Friday and vote against an election. That’s what the Conservative Party will be doing and so I would encourage the opposition to do the same thing, pass the estimates and let the programs continue.”

He told the heroic tale. Of the economic action plan—sorry, the Economic Action Plan—that is saving Canada as we speak, of the clarity and cash and opposition demands. He boasted of his government’s work so far and promised more of it. He repeated the sort of claim Mr. Ignatieff had earlier dismissed as inaccurate. He spoke ominously of the coalition.

He shrugged and sighed and shook his head. He gestured with both hands as he generally does when pleading his case. He spoke quietly. He smiled slightly. He refuted and interpreted Mr. Ignatieff’s demands as he saw fit. He seemed preoccupied by the proper processing of paperwork.

“Those kinds of changes and other major changes,” he vowed, “cannot be done on the back of an envelope in a few days.”

“I’d be happy to meet him,” he offered, “But, you know, we just put out a report on the very subjects he requested.”

“There is a long-term challenge,” he noted, “and there are no quick fixes.”

“This is not something we can do in a week or two weeks,” he claimed.

“That’s not an easy question,” he explained. “It’s not a back-of-the-envelope thing.”

Near the end of his time, he confessed confusion with Mr. Ignatieff’s tone.

“It’s very difficult to respond to an ultimatum that contains no ultimatum,” he reckoned. “Usually you say do X or else. You don’t just say or else.”

He laughed at his own quip.

He took one more question, turning serious, shrugging several more times and dismissing the vagaries of his rival.

Thanking reporters for 15 minutes of their attention, he smiled slightly, then took his leave.

]]>http://www.macleans.ca/politics/ottawa/the-commons-between-two-press-conferences/feed/19‘Anybody can do that’http://www.macleans.ca/politics/ottawa/anybody-can-do-that/
http://www.macleans.ca/politics/ottawa/anybody-can-do-that/#commentsMon, 15 Jun 2009 01:02:49 +0000http://www2.macleans.ca/?p=64298Jim Flaherty tries to explain why Kevin Page is wrong to say that tax hikes or spending cuts are going to be necessary to get the country back out of…

]]>Jim Flaherty tries to explain why Kevin Page is wrong to say that tax hikes or spending cuts are going to be necessary to get the country back out of deficit.

“He’s wrong,” Flaherty told journalists in a conference call from a G8 finance ministers’ meeting in Lecce, Italy. “Because he says growth rates likely will be slower than I had predicted. Now, if you make an assumption with respect to lower growth rates, then you get the results that he postulates. But anybody can do that.”

]]>http://www.macleans.ca/politics/ottawa/anybody-can-do-that/feed/16The Commons: So much to answer forhttp://www.macleans.ca/politics/ottawa/the-commons-so-much-to-answer-for/
http://www.macleans.ca/politics/ottawa/the-commons-so-much-to-answer-for/#commentsTue, 02 Jun 2009 23:11:59 +0000http://www2.macleans.ca/?p=61590From the deficit to asset review to Canada Pension, all arrows were aimed at Flaherty

]]>The Scene. The good news for the Finance Minister was this: a full 45 minutes of Question Period passed this day without a single query about a federal deficit that may now be on track to total upwards of $170 billion. Not until after QP, surrounded by reporters, did the increasingly gaping hole in the national treasury come up. At which point, Jim Flaherty’s response was as follows.

“Well, you know, economists at TD and economists at the other banks are entitled to their view. I’m sure different economists will have different views. All of them were on average more optimistic than I was in the budget in January but they’re on the low side of the private sector forecasters right now.”

Er. Well, don’t get too worried about that $170 billion then. Indeed, it could be worse. For sure, it might be worse.

That though will be for whoever the Finance Minister is in 2014. Mr. Flaherty, no fool, will have surely bequeathed the position to someone else by then. Denis Coderre, say. Or Thomas Mulcair. Or Pierre Poilievre. Or whoever Prime Minister Gilles Duceppe decides to let handle the books.

In the meantime, the bad news for Mr. Flaherty was this: even without, apparently, the time to prepare some questions about our increasing indebtitude, the opposition still arrived for Question Period ready to press all sorts of issues said to demonstrate some failing or another in the minister.

First to get Mr. Flaherty on his feet was Gerard Kennedy. The feisty Liberal, citing an official-sounding report, suggested that, despite what you might’ve heard about that $170-billion deficit, the government wasn’t spending its money particularly wisely.

The Finance Minister attempted to dazzle him with official-sounding jargon. “Mr. Speaker, the newspaper report that the honourable member refers to is misleading,” Flaherty began simply. “Federal government spending actually has increased. Relative to the last quarter of 2008, federal spending increased by $1.5 billion, or 2.4 per cent, on an annualized basis. What was different was that we had lower debt charges in the first quarter due to lower interest rates, and that had a significant dampening effect on growth, but spending on programs rose over $3.2 billion, or 6.2 per cent, in the first quarter of 2009, relative to the last quarter of 2008.”

Kennedy tried again. “Mr. Speaker, it was the Finance Minister, on January 27, who said it was absolutely essential to get the projects going and the money flowing within 120 days; four months,” he shot back. “The deadline has come and gone, and all Canadians have to show for it are photo ops with Conservative ministers.”

Across the way, Gary Goodyear started to clap, then, finding himself alone in this regard, thought better of it.

“The construction season is well underway, but instead of funding speeding up it has slowed down and no jobs were created,” Kennedy continued. “Canadians need to know if it is because the Finance Minister is wrong or because the minister responsible for infrastructure is incompetent, or both.”

“Both!” sang the Liberals. “Both!”

Oddly, Flaherty did not concur. “Mr. Speaker, if we look at the unprecedented investments made in every region of this country, it is indeed impressive,” he said. “We saw just today the Minister of Public Works in Quebec announcing a deal where some $2.75 billion will be spent to help create jobs in the province of Quebec.”

And if not for such efforts, just imagine what dire straits the giant novelty cheque industry would be in right now.

The Bloc next wanted to know about another report, this one suggesting that the Finance Department was actively wondering whether it should sell the CBC, up to and including George Stroumboulopoulos’ soul patch goatee.

“Mr. Speaker,” responded Mr. Flaherty, “in the budget we announced an asset review which did not include Heritage Canada, which is responsible for the CBC.”

Ralph Goodale stood and wondered if the minister could explain why various auto dealerships in Saskatchewan were struggling to attain commercial credit.

“The reality,” Mr. Flaherty observed, “is there are some auto dealerships in the country that are at excess capacity as we have seen with respect to General Motors.”

David McGuinty, apparently finding the Bloc’s questions insufficient, stood and restated concerns of a blue light special in the government asset aisle.

“Mr. Speaker, last fall, the government failed to deliver a serious fiscal plan to deal with the recession,” he began. “Worse, it attempted to hide the fact that it had already returned Canada to deficit by booking a $4-billion fire sale of Crown assets. Now we learn every major Crown asset is on the Conservatives’ chopping block. Will the government disclose its criteria for this review and guarantee that this is not an ideological mission to dump institutions such as the CBC, VIA Rail and Canada Post? After all, they were all on the Prime Minister’s hit list when he was the head of policy with the Reform Party.”

“Why can’t you be more like your brother?” chirped John Baird from the front row.

“Why can’t you be more like a minister?” snapped a Liberal in Baird’s direction.

“We just want to sell you off,” quipped Jeff Watson.

“Mr. Speaker, I know the member must have read the economic action plan because he voted for it,” Flaherty replied, perhaps getting a bit impatient now. “If he has forgotten, then perhaps I can remind him that in the economic action plan that he voted for, we set out an asset review. The first stage of the review will specifically focus on the following departments: finance, Indian and northern affairs, natural resources, transport and infrastructure portfolios. Not Heritage Canada.”

Recognizing this as only sort of an answer, McGuinty tried again. Flaherty made a second claim to fiscal prudence.

Then a Conservative was up, lofting a friendly question at the minister about the multi-million-dollar compensation provided to the board of the Canada Pension Plan. Flaherty stood and advised that he had sent the board a letter asking the chair to ensure that everything was more or less cool.

This was not good enough for the NDP’s Thomas Mulcair.

“Mr. Speaker, in order to help the minister assess the response, I might want to bring the following facts to his attention,” he began, innocently enough. “The CPPIB lost $24 billion. The members gave themselves multi-million-dollar bonuses because they say it is based on a four-year rolling average, but they did not even beat inflation over those four years. In fact, the United Church Pension Board, a multi-billion dollar pension, an all-volunteer board, outperformed them to 2:1. If it had invested exclusively in government bonds, it would have made $13 billion more over the past 10 years.”

Mulcair was in full frantic flight. “I hope that helps him,” he concluded. “How much does the CPPIB have to lose before he finally says ‘no?’ ”

After Mr. Flaherty offered him a perfunctory response, Mulcair moved on to the compensation claimed by executives of the recently bankrupt Nortel. “Mr. Speaker,” responded Flaherty, “pension regulation of Nortel is the responsibility of the provincial government not the federal government.”

To close the show, the NDP turned matters over to Pat Martin, the perfectly manic member from Winnipeg. Here, then, would be the climactic drama.

“Mr. Speaker, France would not sell the Eiffel Tower any more than the United States would sell its Statute of Liberty,” he moaned, shaking his fist, then waving his arms. “We now have learned that every Canadian institution by which we define ourselves as Canadian is on the auction block, or should I say the government’s hit list. The Royal Canadian Mint, the CBC, VIA Rail are on that list. The government might as well hang a billboard on the Peace Tower that says ‘Fire Sale. Going out of Business. Everything Must Go.’ ”

From the far end of the room, he lamented all he could see.

“It is a poor business manager who tries to balance the books by selling off everything of any value,” he finished, attempting an appeal to reason. “Will the government not just admit that this fire sale of assets is more about ideology than it is about economics?”

“Mr. Speaker, on a housekeeping note, I am concerned about the quality of the sound system in this place,” Flaherty quipped. “This is the third or fourth time this question period that I have pointed out that if anyone wants to read the budget, Canada’s economic action plan, which is a wonderful book, they would see that Heritage Canada is not listed in the asset review for this year.”

At that last qualifier, the Liberals cried, “A-ha!” They had him, they figured. But by then Question Period was all but over, Flaherty having escaped to see another day.

]]>http://www.macleans.ca/politics/ottawa/the-commons-so-much-to-answer-for/feed/26The indictmenthttp://www.macleans.ca/politics/ottawa/the-indictment/
http://www.macleans.ca/politics/ottawa/the-indictment/#commentsTue, 02 Jun 2009 20:10:51 +0000http://www2.macleans.ca/?p=61556From Michael Ignatieff’s scrum after QP today.Question: Will you be moving a motion of non-confidence before the summer break and will you also be supporting the Main Estimates, voting …

Question: Will you be moving a motion of non-confidence before the summer break and will you also be supporting the Main Estimates, voting for the Main Estimates (off microphone)?

Michael Ignatieff: I don’t want an election. Canadians don’t want an election. But here’s where I am. I’m trying to make Parliament work with a government that every day is displaying more flagrant examples of incompetence. We’ve got a major medical crisis with the isotopes. They’ve got no plan. We’ve got, Toronto Dominion Bank just announced that the deficit over five years will be, wait for this, $168 billion. That’s the biggest number anybody has ever heard of. The public finances of this country are not under control. Right? Third, we’ve got an unemployment crisis with unemployment surging across the country. We’ve got Premier Campbell, we’ve got Brad Wall, we’ve got Premier McGuinty saying let’s do something about a national standard for EI. I’m not fancy about how we do it, but let’s do it. Right? We’ve got stimulus that needs to get out the door and only 6% of the stimulus has actually reached the country in the middle of the construction season.

So look, I want to make Parliament work. Canadians don’t want an election. I don’t want an election, but we have a problem, a serious problem about this government’s confidence, and I’m getting to the answer, next week, next week they have their second report card. Right? And as I said at the beginning of this, we’re holding these guys on probation. We’ll look at the data when we get it and we will make a serene and clear decision probably in the middle of next week. Thank you.

]]>http://www.macleans.ca/politics/ottawa/the-indictment/feed/28Just in time for QPhttp://www.macleans.ca/politics/ottawa/just-in-time-for-qp/
http://www.macleans.ca/politics/ottawa/just-in-time-for-qp/#commentsTue, 02 Jun 2009 17:58:54 +0000http://www2.macleans.ca/?p=61499Hope the Finance Minister enjoyed the theatre last night. He might not enjoy this afternoon’s show.The federal government will run a cumulative deficit of roughly $162-billion over five years, …

]]>Hope the Finance Minister enjoyed the theatre last night. He might not enjoy this afternoon’s show.

The federal government will run a cumulative deficit of roughly $162-billion over five years, or nearly double what Ottawa projected in its most recent budget, economists at Toronto-Dominion Bank said Tuesday. As a result, the government will be nowhere near a return to surplus in 2013-14, as Finance Minister Jim Flaherty said in his January budget. According to the TD forecast, Ottawa will record a $19-billion deficit that fiscal year, as opposed to an anticipated $700-million surplus.

]]>http://www.macleans.ca/politics/ottawa/just-in-time-for-qp/feed/15Iggy in a chairhttp://www.macleans.ca/politics/ottawa/iggy-in-a-chair/
http://www.macleans.ca/politics/ottawa/iggy-in-a-chair/#commentsFri, 29 May 2009 19:55:49 +0000http://www2.macleans.ca/?p=60902The Globe interviews Michael Ignatieff, with all sorts of random, jumpy cuts so you won’t get bored.…

]]>http://www.macleans.ca/politics/ottawa/iggy-in-a-chair/feed/11Hey, remember late 2004?http://www.macleans.ca/politics/ottawa/hey-remember-late-2004/
http://www.macleans.ca/politics/ottawa/hey-remember-late-2004/#commentsFri, 29 May 2009 17:30:15 +0000http://www2.macleans.ca/?p=60829Back to the previous Conservative opposition’s demand for objective analysis of the national finances. Here is the NDP’s second question today and the current Conservative government’s response.Ms. Jean Crowder …

]]>Back to the previous Conservative opposition’s demand for objective analysis of the national finances. Here is the NDP’s second question today and the current Conservative government’s response.

Ms. Jean Crowder (Nanaimo—Cowichan, NDP): Mr. Speaker, in the election the Prime Minister said we would have no deficit. In November, that changed to a small surplus. In January, that changed again to a $34 billion deficit. Now the Conservatives are admitting to the largest shortfall in Canadian history. The finance minister has changed his numbers so often that no one is confident that he knows what he is doing. For the good of the country, will the Prime Minister agree to turn the books over to the Parliamentary Budget Officer for an honest appraisal?

Mr. Ted Menzies (Parliamentary Secretary to the Minister of Finance, CPC): Mr. Speaker, the answer to that is no. We have a very competent finance minister who has done a great job of leading us through the outcome of a worldwide recession. In fact, we have put $29 billion, almost 2% of the GDP, into the economy as stimulus money this year. We care about Canadians. We are helping Canadians. We are there to help industries that are struggling. We are there to help those who are unemployed.

]]>http://www.macleans.ca/politics/ottawa/hey-remember-late-2004/feed/1Hey, remember the early 80s?http://www.macleans.ca/politics/ottawa/hey-remember-the-early-80s/
http://www.macleans.ca/politics/ottawa/hey-remember-the-early-80s/#commentsFri, 29 May 2009 17:12:58 +0000http://www2.macleans.ca/?p=60818Back to yesterday’s QP. Specifically this answer of the Prime Minister’s.Mr. Speaker, the record of the Liberal Party is this: Liberals got this country into deficits when borrowing was …

]]>Back to yesterday’s QP. Specifically this answer of the Prime Minister’s.

Mr. Speaker, the record of the Liberal Party is this: Liberals got this country into deficits when borrowing was at record levels, and then when recession came, they were cutting the unemployed and raising taxes right in the middle of a recession, something this party will never do.

For as long as the current Conservative government has been in power, it has found convenient excuse in the various failings of the “previous Liberal government.” But here is an entirely new standard for historical reference.

It would not seem possible for this to be a reference to the governments of either Jean Chretien or Paul Martin. The recession of the early 90s was over when Chretien took power in November 1993. While the United States fell into recession in 2001, Canada appears to have escaped that distinction.

Indeed, to find a case of a Liberal government in power during a recession, you have to go back to the early 1980s, when Pierre Trudeau’s government presided during a downturn that lasted from July 1981 to October 1982. Did Trudeau actually raise taxes during that period? I’m still sorting that out. But, assuming he did, the Prime Minister is referring here to something that happened 27 years, three governments and six prime ministers ago. There is just one current MP who was in office at the time. And Bob Rae was with the NDP then. (There are, on the other hand, four Conservative MPs—Greg Thompson, Rob Nicholson, Jean-Pierre Blackburn and Lee Richardson—who were with the Mulroney government that oversaw the early 90s recession.)

The onus now, obviously, is on the Liberals to mount a coherent campaign against the policies of the Diefenbaker administration.

]]>http://www.macleans.ca/politics/ottawa/hey-remember-the-early-80s/feed/28The Commons: And so Stephen Harper finds himself in agreement with the Toronto Starhttp://www.macleans.ca/politics/ottawa/the-commons-and-so-stephen-harper-finds-himself-in-agreement-with-the-toronto-star/
http://www.macleans.ca/politics/ottawa/the-commons-and-so-stephen-harper-finds-himself-in-agreement-with-the-toronto-star/#commentsThu, 28 May 2009 22:18:55 +0000http://www2.macleans.ca/?p=60633The government faces another barrage of $50-billion questions

]]>The Scene. Relaxing in the moments before Question Period, Michael Ignatieff and Stephen Harper looked across the aisle and nodded at each other—the Prime Minister no doubt recognizing the man opposite as the guy in all those bootlegged VHS tapes he’s been watching.

A short while later, Chuck Strahl, the Indian Affairs Minister, strolled across the aisle and engaged the leader of the opposition in what seemed a friendly conversation. Though the substance of the discussion was unclear, by all appearances Mr. Strahl understood clearly the words that were coming out of Mr. Ignatieff’s mouth.

As demonstrations of bipartisan collegiality, these were heartening scenes. As demonstrations of human ability, they were important clarifiers. Indeed, if these moments are any example, let there be no question that government and opposition do acknowledge and, at least passably, comprehend each other, whatever misconceptions today’s asking of questions and airing of accusations may have left you with.

“Mr. Speaker, 37 days ago the Minister of Finance said we were on track and now we know we have gone right off the rails,” Mr. Ignatieff began, metaphorically, this afternoon. “Thirty-seven days ago the deficit stood at $34 billion. Now the finance minister says it has ballooned up over $50 billion, but he did not say how much more over $50 billion.”

Here, he lowered his voice a touch. “Canadians are tired of these sorry guesstimates,” he said. “They want to know the truth.”

And so, a question. “When will the Prime Minister tell us the truth?” Mr. Ignatieff asked. “How much more, Prime Minister? How much more?”

The Pee-wee’s Playhouse secret word of the day—hypocrisy!—had been revealed in the 15 minutes before Question Period reserved for the celebration of charitable causes and denigration of political foes. But here the Prime Minister sought to make it official, yelling and pawing at the air as usual.

“Mr. Speaker, at the end of this year the deficit will depend, obviously, on the performance of the economy,” he said, leaving the final tally to your imagination. “But what Canadians are wondering about when it comes to more is the leader of the Liberal Party. He comes here, tries to criticize the deficit, but day after day he is here demanding literally tens of billions of dollars of new spending from this government, new spending, permanent spending, unaffordable spending to be paid for by tax increases. Everyone knows his position on the deficit. It is just hypocrisy.”

Everyone screamed real loud.

Back came Ignatieff, now demonstrating his own ability to yell and point.

“Mr. Speaker, my party has an unimpeachable record in fiscal responsibility,” he snapped. “Liberals left them the record that they squandered.”

There were howls from the government side. Gordon O’Connor, the Conservative whip, motioned for his seat-fillers to quiet themselves.

“The Prime Minister made a second claim yesterday, which was that the deficit will be ‘short term.’ There is not a Canadian who believes that is true,” Ignatieff continued. “He got us into this mess. How does he propose to get us out?”

The Prime Minister stood again, only he seemed entirely to have missed the question.

“Mr. Speaker, the record of the Liberal Party is this,” he cried. “Liberals got this country into deficits when borrowing was at record levels and then when recession came, they were cutting the unemployed and raising taxes right in the middle of a recession, something this party will never do.”

Jay Hill, the government house leader, sprang to his feet to salute the boss, calling out to those around him who were not so quick to express their enthusiasm.

“Way to get them up there, Jay!” laughed Ralph Goodale, the Liberal house leader.

Mr. Ignatieff, switching to French, accused the government of incompetence. Mr. Harper, following suit, quoted from the Toronto Star.

“The editorial in the Toronto Star goes on to say, ‘Let’s have a real conversation. The Liberal leader has said he would be open to the idea of raising taxes. The Prime Minister isn’t,'” he reported to great cheers, Steve Blaney, a backbencher filling Lawrence Cannon’s seat to Stephen Harper’s right, leaping to his feet with a passable imitation of a trained seal.

Alas, despite declines in the industry, newspapers these days remain full of words. And while the Prime Minister had reported the above passage accurately, he’d obviously neglected to read further. “Would he undertake massive spending cuts or continue to run deficits?” the Star editorialists asked of him. “Canadians deserve an answer.”

No such answer was coming this day.

Goodale stood next and dared allege the Conservative deficit was “structural.” Jim Flaherty rose and charged the opposition not simply with hypocrisy, but of actually being hypocrites. This move from the behavioral to the personal was too much for the Speaker. “Order, please,” he said. “Members do enjoy freedom of speech, but calling names of other honourable members, I think the member knows, is out of order. We do have hypocritical things happen in the House from time to time, but there is no hypocrite sitting here.”

Marlene Jennings gave it a try, the Finance Minister referred her to the Toronto Star. The Liberal tried again, the Finance Minister wondered what she had against the sick and elderly.

Bob Rae attempted to gain clarity. “Mr. Speaker, 37 days ago, the Minister of Finance knew that the forestry industry was in trouble. He knew that EI was up. He knew that the auto industry was in the tank,” he reported. “Thirty-seven days ago, the minister said: ‘I’m staying with our budget projection. We’re on track.’ I would like to ask the minister a very simple question, which he has still not answered. How could he have made such a terrible statement a mere 37 days ago with respect to the financial situation in Canada?”

Flaherty demurred. “Mr. Speaker, I pay attention to the questions from one of the leading Canadian experts in deficits, having brought Ontario through that period from 1990-95,” he said.

“Mr. Speaker,” begged Rae, “I am an amateur in this regard.”

The Conservatives cheered, the government side strangely jovial considering yesterday’s news.

“Mr. Speaker, the minister has become the expert,” Rae tried again. “He is going to win the Nobel Prize with respect to the financial situation.”

The Conservatives cheered. “More! More!” they sang.

“Order,” the Speaker called. “There will be more, but we have to have some order so that we can hear it. The honourable member for Toronto Centre has the floor. We will have some order, even if he is addressing a Nobel Prize winner.”

The Conservatives laughed.

After a battle of sports analogies between Flaherty and Ken Dryden, the Liberals sent up John McCallum to cap the day’s assault.

“Mr. Speaker, three years ago, under a Liberal government, Canada was poised to eliminate its net debt. Think of it,” he mused. “Our children and our grandchildren would no longer have to pay our way. Now, we all know that our $50-billion-man cannot count and that Canadians cannot count on him. But can he at least guess in which century his policies will lead to the elimination of Canada’s net debt?”

He was, perhaps, being facetious. Nonetheless, Flaherty ventured a response.

“Mr. Speaker,” he said, “as the International Monetary Fund noted on Friday, our government paid off about $40 billion in debt in the first three years of our mandate.”

Showing a remarkable ability for simple subtraction, McCallum did the math.

“Mr. Speaker, that $40 billion debt paid down is more than wiped out in a single year by the finance minister’s more than $50 billion deficit,” he noted.

Then, a story.

“That,” McCallum said, “reminds me of a story. I ask members to picture it. Queen’s Park, November 2001, Ontario’s finance minister tables an economic statement that says the books are balanced. Thirteen days later he admits there could actually be a $2 billion, $3 billion, $4 billion, or $5 billion deficit. Who was that man? It was our $50 billion man. Did the Prime Minister really think that theatre of the absurd needed a federal replay?”

“Mr. Speaker, the provincial budget in Ontario in 2001-02 was balanced,” he replied. “Yes it was. It was an excellent balanced budget.”

So there. The Finance Minister then referred, one last time, to the hallowed views of the Toronto Star.

Left unacknowledged was that to the right of that editorial was a cartoon. On the one side of that graphic, the Governor General, smiling and stylish, a bit of seal heart in her left hand. On the other side, the Finance Minister, his budget in tatters at his feet, a large black crow stuffed in his mouth.

]]>The Scene. At each MP’s desk, a red box had been placed with a gift package of sporting equipment intended to celebrated the 2010 Olympics in Vancouver. While he waited for Question Period to begin, Peter MacKay removed the swimming goggles, put them on his head, then put one of the socks on his nose.

Class resuming after a week off, the mood was relatively light. The 15 minutes before Question Period included just one shouted denunciation of the Liberal leader. The Speaker advised that he would be looking into a report of unparliamentary language made before the break. Then Michael Ignatieff stood in an attempt to be serious.

“Mr. Speaker, the country is facing record unemployment, record bankruptcies, record hardship for small businesses, especially auto dealers,” he began, congratulating the government on its acheivements. “And still the stimulus is not flowing. It is nearly June. Cities and municipalities are still waiting for the infrastructure funding that was promised in the budget. The government has already missed the June construction season. Why has only six per cent of the stimulus gotten out of the door?”

The Human Resources Minister was in Oshawa, reannouncing something from January’s budget. The Finance Minister was in Quebec, warning that the wild guesses on which that budget was based now seem “substantially” off the mark. The Prime Minister was unaccounted for. So the day would belong to John Baird.

“Mr. Speaker, we are working co-operatively with provinces and municipalities,” the Transport Minister said. “We are getting the job done. That non-partisan work is really paying dividends.”

Having not said a single thing of any consequence, he proceeded to read into the record something Mr. Ignatieff had said that seemed to be only vaguely related.

Ignatieff tried again. “Mr. Speaker, still there is no answer to the question of why only six per cent of the stimulus has gone out on the 26th of May,” he said.

“Improving EI eligibility will put money in the hands of 150,000 Canadians and their families, people hardest hit during this crisis,” he continued, adding another matter to the queue. “That is effective, immediate and targeted stimulus, and it will get there before the honourable member’s infrastructure programs even begin to kick in. The government can do this without raising payroll taxes and it can do it without raising benefit levels or duration, so why will the government not make EI work?”

Back to Baird. “Mr. Speaker, our government is committed,” he said, “to doing absolutely everything we can to help Canadians who, through no fault of their own, find themselves unemployed.”

He reannounced Diane Finley’s reannouncement, then repeated allegations of a nefarious Liberal desire to raise taxes on the unemployed, destroy small businesses and eliminate jobs.

“Mr. Speaker, what the minister has just said is absolutely false from one end to another,” huffed Ignatieff, repeating his question in French.

Next it was John McCallum’s turn. What, the Liberal finance critic wondered, of the government’s purported 120-day deadline for emergency spending?

“Mr. Speaker, Canadians know what that answer means; 120 days and zero jobs created,” snapped McCallum. “What those days have delivered is an IMF report showing that the government is actually running a $120 billion deficit, not the $80 billion that it claims. This is confusing for Canadians. The Conservatives are promising money. They are not spending money, but the deficit is going through the roof.”

“The member should come clean with Canadians, unveil the Liberal plan to raise taxes so we can have an honest debate,” replied Baird, talking louder now and apparently without irony.

With the Bloc taking up the questions then, Baird handed off to National Revenue Minister Jean-Pierre Blackburn, the responders interchangeable when the responses are so rote.

Eventually Jack Layton stood to beg for clarity on the matter of employment insurance. Here, again, came Baird.

“Mr. Speaker,” he said, “the New Democratic Party came out against our budget before it was even presented in the House of Commons.”

The NDP leader tried again to gain clarity.

“Coalition!” cried Baird. “Socialist scheme!”

Layton moved on to pensions. Baird was the day’s expert on this too.

“Mr. Speaker, it is this government,” the minister observed, “not the NDP, that has brought forward a range of services and support to help seniors … I can say that this side of the House is committed to an economic action plan that will give more jobs, more hope and less taxes to Canadians, unlike the Liberal leader and his friend in the NDP.”

Brusque and unimpressed, Liberal Michael Savage rose next.

“Mr. Speaker,” he grumbled, “the only things in this House that are shovel ready are the answers from that minister.”

The Liberals jumped up to applaud. Across the way, Baird smiled, then stood too to clap and congratulate Savage on his effort.